Vancouver: Taxpayers in Vancouver may have to pay for building the 2010 Winter Olympics’ main athletes’ village after private funding dried up amid rising costs and a slowing economy, officials said on Friday.
The city said it was committed to completing the $840 million project in time for the Games in February 2010, but was struggling to renegotiate financing for the complex that will house up to 2,800 Olympic competitors.
“The Olympic village is a billion dollar project, and the city’s on the hook for all of it,” Vancouver Mayor Gregor Robertson told reporters. “It’s a bitter pill for taxpayers to swallow.”
The project’s original financing called for the athletes’ accommodations to be built by a private developer on city land, with the units converted into regular housing that would be sold off after the Olympics to pay for it.
The facility near Vancouver’s downtown is being built by privately held Millennium Development, which would also buy the land from the city after the Olympics.
The project lenders, led by US-based Fortress Investment Group, stopped advancing money to Millennium in September amid rising construction costs and fears that Vancouver’s slowing housing market meant real estate sales would not pay off the loan.
City officials said Vancouver may now end up paying for the project because it agreed in 2007 to guarantee the loan to Millennium. The city did so by promising Fortress it would complete the project in time for the Olympics if Millennium was unable to do.
Robertson, who was elected mayor in November, accused the city’s previous administration of trying to hide that agreement from the public.
The funding cut-off in September forced the city to lend Millennium $84 million so construction could continue. That money will be exhausted in mid-January.
City officials said they did not question Fortress’ decision to cut off funding and added they believed a new financing deal could be reached with the lender.
Fortress officials were not available for comment.
The amount of money the city eventually loses on the deal would depend on how much real estate prices have recovered in 2010, city officials said.
Fortress also owns resort operator Intrawest Corp that runs the Whistler ski area north of Vancouver where alpine ski events will be held in 2010. The Games will have a smaller athlete village in Whistler that is funded separately.